Does Administrative Reform Improve the Business Environment in China? A Mixed-Method Analysis Based on Administrative Burden Theory

Abstract

Does administrative reform boost the favorable business environment? What is the mechanism underlying such reform? This study explores the relationship between administrative reform and the business environment in China via a mixed-method approach. This paper extends administrative burden theory to government-company interactions and then proposes a framework that bridges administrative reform and the business environment. Based on firm-level survey data and case data, this quantitative analysis confirms that administrative reform can significantly boost the favorable business environment and that administrative burden is a mediating variable during this process. The qualitative comparative analysis contends that there are three different configurations that can boost the favorable business environment: collaborative governance, government-driven, and enterprise-driven configurations. Theoretically, this paper extends the administrative burden theory, which brings companies into this theory as new actors. We also provide reform advice for practitioners.